Guide to overpaying a mortgage
Overpaying your mortgage can help take years off your repayment time.
For an estimate of how much money you could save, try our mortgage overpayment calculator.
The benefits of overpaying a mortgage
- You can start to reduce your mortgage balance, meaning you could potentially pay off your mortgage sooner.
- You can save towards a future mortgage payment holiday.
- When savings rates are low, the amount you save on your mortgage interest could be more than you would otherwise earn in savings interest.
When to make early mortgage repayments
There are certain circumstances when overpaying a mortgage is a good idea:
- If you get a regular bonus or inherit some money so you can make a lump-sum payment.
- If you're planning on starting a family and would like to reduce or stop paying your mortgage while on maternity or paternity leave.
- If you like the idea of being mortgage-free earlier.
Ways you can overpay
Overpaying a mortgage is easy to do and just means paying a bit extra on top of your usual monthly payment, or paying occasional lump sums.
Any overpayments you make will be credited to your mortgage account the same day, which will reduce the amount you owe straight away. And because interest on your mortgage is charged daily, your overpayment will reduce the amount of interest charged straight away.
Try our overpayment calculator and see how much you could save.Overpayment calculator
Types of overpayment
Things to be aware of
- The amount you can overpay each year without receiving an Early Repayment Charge depends on the mortgage deal you have.
- All of our mortgage deals allow you to overpay up to 10% of your mortgage balance each year. Some products allow more.
- Once you have made an overpayment, you can’t take that money back from your mortgage like you could a savings account. Though it may be possible to take a payment holiday.
Please check your product factsheet and mortgage offer for full details of overpayment restrictions and Early Repayment Charges.
Having trouble paying your mortgage? Find out how we can help.